The Financial Services Authority (FSA) has been investigating the way Payment Protection Insurance is being sold by loan providers which include some of the UK's biggest banks and building societies. And it's big business. Sales of PPI as it's called,
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PPI is designed to protect borrowers by paying monthly loan repayment in the event that the borrower becomes unemployed or unable to work though accident or illness. Many lenders sell the insurance alongside the loan with around 50% of customers agreeing to the insurance.
However, according to the Department of Trade & Industry,
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Even worse, some lenders are failing to point out to borrowers that the cost of the insurance for the full period of the loan, was being added as a lump sum at the outset rather than being paid as a monthly premium. This means that the borrower cannot cancel the insurance without redeeming the entire loan and renegotiating a new loan.
And hey,
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Take an example. Last year a high street bank was charging 5,150 for PPI to cover a loan of 16,
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So what are the lessons?
If your lender offers you PPI cover ask for the monthly premium with and without PPI. That way you can see the true cost of PPI.
Find out whether PPI is added to the loan as an initial lump sum. If it is back off,
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Shop around for competitive quotes. A search on the Internet for Payment Protection Insurance or Income Protection Insurance will find you lots of web sites to try.
Check out the conditions on the insurance. Particularly check out the exclusions which invalidate a claim. For example, some policies stipulate that you must have been working continuously for 6 months prior to a claim for a minimum of 20 hours a week. Seasonal or temporary work is usually excluded. When you take the insurance out you must be in good health and know of no impending disability and not be aware that you could become unemployed. Could these exclusions apply to you? If so,
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Please don't waste your money. PPI insurance is a good idea so long as it is cheap and on a monthly cancellable contract. After all your circumstances may change. Then check the policy's exclusions to make sure that the insurance is valid for your personal circumstances. [返回上一页] [打 印]相关的主题文章：
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